Merrill Deal Hastens
Wall Street Retreat
From Funds

For Some Financial Firms,
Allure of Managing Money
Fades in a Tougher Climate

By

Tom Lauricella and

Ian McDonald

Updated Feb. 14, 2006 12:01 a.m. ET

With its proposed acquisition of a big stake in BlackRock Inc., Merrill Lynch & Co. is joining a steady stream of banks, brokerage houses and insurance companies fleeing fund management, many of them just a few years after piling into the business.

As currently envisioned, Merrill would swap its huge fund-management business for a roughly 49% stake in BlackRock, in a transaction valued at more than $8 billion. BlackRock would end...